Uncertainty dominates new hemp market

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In this May 19, 2014 photo, a farmer holds a handful of hemp seeds, on a day of planting in Sterling, Colo. (AP Photo/Kristen Wyatt)

STERLING, Colo. (AP) - Marijuana's square cousin, industrial hemp, has come out of the black market and is now legal for farmers to cultivate, opening up a new lucrative market. That was the idea, anyway.

Would-be hemp farmers are having mixed success navigating red tape on everything from seed acquisition to processing the finished plant. It will take years, farmers and regulators agree, before there's a viable market for hemp.

Hemp is prized for oils, seeds and fiber, but its production was prohibited for five decades because the plant can be manipulated to enhance a psychoactive chemical, THC, making the drug marijuana.

The Farm Bill enacted this year ended decades of required federal permission to raise hemp, but only with state permission and checks to make sure the hemp doesn't contain too much THC.

Fifteen states have removed barriers to hemp production, though only two states are forging ahead this year - Colorado and Kentucky. Both struggled to get their nascent hemp industries off the ground.

"We're just going to try and see if this works," said Jim Brammer, a Colorado alfafa and hay farmer who acquired one of the state's 114 licenses to raise hemp.

Brammer agreed to let activists try the crop on a single acre of land in exchange for a cut of the proceeds, if any materialize. He's not optimistic. "If it comes in nice, then great. If not, then at least we tried something new," Brammer said.

A 2013 report by the Congressional Research Service pegged hemp imports at $11.5 million in 2011, a tiny sum relative to other imported crops. That study concluded that despite an ardent fan base and a market activists peg at about $100 million a year, "the world market for hemp products remains relatively small."

And U.S. farmers won't even be able to tap that small market without federal authorities removing barriers to seed acquisition.

Kentucky's first industrial hemp plantings were delayed for much of May, when federal authorities ordered nearly 300 pounds of hemp seeds from Italy detained by U.S. customs officials in Louisville.

State agriculture authorities sued the Justice Department, the Drug Enforcement Administration, U.S. Customs and Border Protection and Attorney General Eric Holder to seek the seeds. DEA eventually relented, issuing a permit to allow limited hemp plantings for research in Kentucky.

Back in Colorado, there's been no federal help acquiring seeds, despite a letter from Gov. John Hickenlooper this year requesting permission to import Canadian hemp seeds. Instead, Colorado authorities are taking a don't-ask-don't-tell approach.

Brammer got his seeds from hemp-legalization activists who won't say where they got them. Colorado farmers without such a connection are either buying black-market seeds for as much as $10 each, or giving up entirely on growing hemp for now.

"I don't have an ounce of seed and I'm not going to the black market to get it," said John Lappart, who grows wheat and millet in Holyoke, Colorado, near the Nebraska border. Lappart was awarded a hemp-cultivation license and planned to try the crop on 8 acres, but he abandoned the idea.

Seed acquisition is just the first problem, Lappart said. He wasn't sure how he'd get the hemp seeds pressed for oil, or what he'd do with the fibrous parts of the plant.

Brammer is far from confident his hemp experiment will be worth the trouble.

He's surrounding his crop with a 5-foot buffer of sudangrass, a tall-growing cover crop intended to hide the hemp from curious passers-by. The hemp activists are working to acquire a pressing machine from Germany to process the seeds into oil. If the presser doesn't materialize, Brammer said with a wry smile, his hemp experiment might be over soon after it began.

"If it's not sold, we'll just grind it up, feed it to the cattle, I guess," Brammer said.